Real Drop in Real Estate Rates

By Sanjay Chaturvedi

Mumbai real estate rates are falling to 2005 level. Docuemnts registered and deals offered in classifieds are real witness of this. Interaction with many builders in the city has revealed that sale has droped to almost fifty percent as compared to December 2007 till March 2008. Though the rates for new projcts have not come down, sale drop will lead to further fall of real estate rates in the city.

Many new projects have started to offer indirect discounts to the actual occupants. Companies and corporate too are waiting for further drop to accommodate their maharajas.

At Nariman Point, though NCPA and other deals were reported highest, but under cutting in the rates and lowest rates were never reported. The last deal for office premises was registered with Rs.18,245/- per sq.ft. For a office space last month. For residential apartment at Cuff Parade was finished with Rs. 22,343/- per sq.ft. The rates for these location were quoted a Rs.26,000/- and Rs.45,000/- respectively.

At Powai, the rates opned by builders at Rs.7,300/- per sq.ft. plus floor rise, whereas the actual dealing at some of the MHADA flats were for Rs.4,300/- per sq.ft. And in a posh development the rates were agreed on Rs.6,000/- per sq.ft.

At Mulund, rates have come down heavily with a slash of Rs.1000/-to Rs.1800/- per sq.ft. At Mira Road, the rates have touched almost Rs.4,000/- is now offering properties at Rs.2,200/- per sq.ft. Commercial and shops do not have any price but any thing which buyer can offer for.

At Santacruz, Khar and Bandra west the rates have touched Rs.25,000/- per sq.ft. is now avalable for Rs.14,000/- to Rs.18,000/- per sq.ft. Many builders have broke the deals with societies on redevelopment since offers made previously are not viable.

At Kandivali and Malad, the rates are worst hit. Builders have recently opened rate at Rs.10,000/- have fallen down to Rs.6,500/- and less.

Investors are selling the stock in Mumbai, Delhi and Chennai and going in for emerging cities where the boom have just started. Mutual Funds and Venture Funds are now coining ideas of sell off stocks and equity in the venture ad wants to liquidate their investment for want to squiring off loss in the stock markets. Brokers are busy in resale and investment sale. Each of them has hundreds of proposals with no buyers in the market. Due to economic conditions, seasonal depression and liquidity crunch besides home loan interest rate hike, the process of declining in real estate rates all over the country is most likely till December 2008.